The Next Industrial Revolution A “crisis of abundance”

Abundance of workers—both those made of cells and those made of bits—could create a glut of labor. The machines may render many humans as redundant as so many vintage washing machines.  Once again, what once seems like abundance will instead be over-supply: The machines may invent their makers out of work.


The Next Industrial Revolution
An interview with the Economist columnist Ryan Avent on his new book about how technology will change the labor force
Sep 6 2016

A “crisis of abundance” initially seems like a paradox. After all, abundance is the ultimate goal of technology and economics. But consider the early history of the electric washing machine. In the 1920s, factories churned them out in droves. (With the average output of manufacturing workers rising by a third between 1923 and 1929, making more washing machines was relatively cheap.) But as the decade ended, factories saw they were making many more than American households demanded. Companies cut back their output and laid off workers even before the stock market crashed in 1929. Indeed, some economists have said that the oversupply of consumer goods like washing machines may have been one of the causes of the Great Depression.

What initially looked like abundance was really something more harmful: overproduction. In economics, as in anything, too much of a good thing can be problematic.

That sentiment is one of the central theses of The Wealth of Humans, a new book by the Economist columnist Ryan Avent about how technology is changing the nature of work. In the next few years, self-driving cars, health-care robots, machine learning, and other technology will complement many workers in the office. Counting both humans and machines, the world’s labor force will be able to do more work than ever before. But this abundance of workers—both those made of cells and those made of bits—could create a glut of labor. The machines may render many humans as redundant as so many vintage washing machines.

Once again, what once seems like abundance will instead be over-supply: The machines may invent their makers out of work.

Last week, I spoke with Avent about his book, how his theories might help to explain the 2016 election, and the future of working. The following conversation has been edited for clarity and concision.

Derek Thompson: In classic Economist style, your title, The Wealth of Humans, is doing double or triple duty. First, it’s a play on Adam Smith’s The Wealth of Nations, and indeed there’s a lot of Smith in here. Second, it’s a book about the most common definition of wealth, money, and how it might be earned and distributed in the future. Third, it’s about Merriam-Webster’s second definition of wealth, which is a surfeit, a surplus, and your argument is that we may be entering a world with too many workers. Anything I’m missing?

Ryan Avent: Those were the ones I had in mind. There may be others lurking.

Thompson: There is an ongoing debate about whether technological growth is accelerating, as economists like Erik Brynjolfsson and Andrew McAfee (the authors of The Second Machine Age) insist, or slowing down, as the national productivity numbers indicate. Where do you come down?

Avent: I come down squarely in the Brynjolfsson and McAfee camp and strongly disagree with economists like Robert Gordon, who have said that growth is basically over. I think the digital revolution is probably going to be as important and transformative as the industrial revolution. The main reason is machine intelligence, a general-purpose technology that can be used anywhere, from driving cars to customer service, and it’s getting better very, very quickly. There’s no reason to think that improvement will slow down, whether or not Moore’s Law continues.

I think this transformative revolution will create an abundance of labor. It will create enormous growth in [the supply of workers and machines], automating a lot of industries and boosting productivity. When you have this glut of workers, it plays havoc with existing institutions.

I think we are headed for a really important era in economic history. The Industrial Revolution is a pretty good guide of what that will look like. There will have to be a societal negotiation for how to share the gains from growth. That process will be long and drawn out. It will involve intense ideological conflict, and history suggests that a lot will go wrong.

Thompson: Even I would admit that is a weird time to predict the end of work, considering that the unemployment rate has been at or under 5 percent all year, the private sector in the U.S. has created jobs for record-high 77 consecutive months, and wages are actually rising at their fastest rate since the Great Recession.

So what is the best evidence that your prediction is plausible?

Avent: I would say the best evidence comes from the wage growth numbers. I know we’ve experienced an uptick in recent months, but we’re seven years into the recovery and still well short of the level of nominal wage growth we would expect, even compared to recent disappointing recoveries. In the bigger picture, for a lot of middle-skilled workers, especially men, you have stagnating wages for several decades. Apart from the top 1 percent, a lot of people are having a lousy time.

If you look at the experience of rich countries across the world, you see there is a tradeoff between wage growth, productivity, and employment growth. Employment in Britain is at an all-time high, and wage growth there has underperformed America and most of Europe. This suggests that the main way that employers are using people in countries like the U.K. is to use them to do low-productivity work.

Thompson: There is a familiar story of technology and the labor force that one might call the “we used to” story. We used to work on farms, we used to work in textiles, we used to work in factories … What’s the next chapter of the “we used to” story? What sector currently employing a lot of Americans is the lowest-hanging fruit for disruption?

Avent: Driving is certainly an area where we’ve seen more rapid progress than I would have guessed. Truck drivers, bus drivers, and train drivers have pretty good pay and those account for millions of jobs. Most importantly, there seems to be an interest among companies employing those workers to bring [the tech that would replace humans] forward. In the long run, I’m optimistic for technology to transform health care, but that’s a harder sector to disrupt.

Machine intelligence will be applied in ways we cannot imagine yet. One example is talking. Today, if you have a problem with a car company, you might end up conversing with a bot over the phone. Those are conversations that we thought weren’t automatable that are now. We used to employ a lot of people to talk to people and people have those conversations with bots.


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America’s total student debt is worth more than Mexico’s entire GDP. Here’s how we got here:

42 million people owe $1.3 trillion in student debt. It’s a profit center for Wall Street and the government. Here’s how we got into this mess.

A generation ago, Congress privatized a student loan program intended to give more Americans access to higher education.

In its place, lawmakers created another profit center for Wall Street and a system of college finance that has fed the nation’s cycle of inequality. Step by step, Congress has enacted one law after another to make student debt the worst kind of debt for Americans – and the best kind for banks and debt collectors.

Today, just about everyone involved in the student loan industry makes money off students – the banks, private investors, even the federal government.

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Sven Giegold, who is a founder of the EU Leaks project

a new initiative called EU Leaks: EUleaks is a European platform where you can submit information in a highly secure and anonymous way. Transparency and accountability are essential for democratic governance. The EUleaks project provides a platform for increasing transparency by providing a new tool for information in the public interest to be made available. EUleaks offers a venue for the realisation of freedom of expression as a fundamental right.


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#Privacy Never use #Apple to Txt Anyone


APPLE PROMISES THAT your iMessage conversations are safe and out of reach from anyone other than you and your friends. But according to a document obtained by The Intercept, your blue-bubbled texts do leave behind a log of which phone numbers you are poised to contact and shares this (and other potentially sensitive metadata) with law enforcement when compelled by court order.

Every time you type a number into your iPhone for a text conversation, the Messages app contacts Apple servers to determine whether to route a given message over the ubiquitous SMS system, represented in the app by those déclassé green text bubbles, or over Apple’s proprietary and more secure messaging network, represented by pleasant blue bubbles, according to the document. Apple records each query in which your phone calls home to see who’s in the iMessage system and who’s not.

This log also includes the date and time when you entered a number, along with your IP address — which could, contrary to a 2013 Apple claim that “we do not store data related to customers’ location,” identify a customer’s location. Apple is compelled to turn over such information via court orders for systems known as “pen registers” or “tap and trace devices,” orders that are not particularly onerous to obtain, requiring only that government lawyers represent they are “likely” to obtain information whose “use is relevant to an ongoing criminal investigation.” Apple confirmed to The Intercept that it only retains these logs for a period of 30 days, though court orders of this kind can typically be extended in additional 30-day periods, meaning a series of monthlong log snapshots from Apple could be strung together by police to create a longer list of whose numbers someone has been entering.


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ESSA: Education Department Releases Guidance on Teachers

The U.S. Department of Education Tuesday released a blueprint to help states and districts make the most of out of more than $2 billion in federal money for teacher support, preparation, training, and more.

The new federal guidance also walks states and districts through changes to this pot of money—known as Title II—under the brand new Every Student Succeeds Act. (More on the changes to teacher quality in ESSA here.)

The department recommends that states and districts use the funds to make sure that teachers are supported from the time they enter educator training programs, through their early years of teaching, and as they take on leadership positions, including the principalship.

And, the guidance reminds states and districts that they have to reach out to teachers, support personnel, community partners, and others when figuring out how to use their Title II funding.

“Educators play a critical role in securing our nation’s economic future and preserving the promise of an excellent education for all children, especially those who have been historically underserved,” said U.S. Secretary of John B. King, Jr., in a statement. “We don’t just want educators to be part of the change; we need them to lead it.”

Teachers and Equity

The guidance encourages states and districts to use Title II funds to make sure that all kids have access to an effective teacher, and to make sure teachers in high-needs schools get access to extra supports.

For instance, states and districts could use the money to:

  • Give bonuses, pay raises, and other perks to attract excellent teachers to high-needs schools.
  • Offer extra pay to teachers who teach in high needs subjects, or teach special populations, such as English-language learners.
  • Create “co-teaching” classrooms in high-needs schools, where beginning teachers work alongside a more experienced educator.
  • Address working conditions in high-needs schools, or give teachers who work in them extra time to plan and collaborate.

Many school districts use their Title II money to cut down on class size. That’s allowable under ESSA, the department says, as long as there is evidence to back up the approach.

Educator Development

School districts across the country are trying to create so-called “career ladders” for teachers, and the department has some suggestions on how to use Title II money to make that happen. For instance, states and districts can:

  • Use federal teacher quality funds to support preparation programs at traditional universities, but also for alternative-preparation programs, and teacher residency programs.
  • Create or choose “academies” to prepare teachers, using funding under ESSA. (More on that below). States that want to go that route must first choose an “authorizer” that will supervise the academies and hold them accountable.
  • Create mentorship programs for new teachers
  • Hire or support “principal supervisors” to help school leaders in their work
  • Train principals, including giving them time to learn from each other.

Teacher Evaluation

States and districts can also use their money to create teacher-evaluation systems, but perhaps just as important, they don’t have to do that. Teacher evaluations based on student outcomes were a huge priority for the Obama administration during its first six or so years in office. It championed the policy through Race to the Top and No Child Left Behind waivers. Under ESSA, states don’t have to create teacher-evaluation systems that rely in part on student test scores, but they can if they want, or they can use their federal teacher quality money to craft other types of evaluation systems.

The department recommends creating evaluation systems that take into account multiple measures, including student academic growth, but also observations, and parent/student surveys. Evaluations should also be valid and reliable, and teachers should be clear on what they are being measured on, and get to see their entire evaluation, not just the overall rating.

Funding Changes

There are some changes to the way Title II money flows under ESSA. For instance, states can now reserve up to 2 percent of their total Title II funding at the state level to help prepare teachers and principals to work in high-needs schools. And they can reserve up to 3 percent of districts’ allocation for principal support. This chart, included with the guidance, illustrates the breakdown of the funding.

Title II snip.PNG

Importantly, states and districts may not have as much Title II money to play around with during the 2017-18 school year, the first year of ESSA implementation, as they do right now. The program is currently getting about $2.3 billion, but spending bills pending in the House and Senate seek to cut it down, from just over $2 billion to $1.9 billion, respectively.

Of course, Title II isn’t the only pot of federal money for teacher quality. In fact, the department doled out $5.1 in Teacher Quality Partnership grants to teacher-preparation programs that use a “residency model”—where prospective teachers take courses but also teach alongside a veteran educator—and other programs with a strong, “hands-on” focus.

The winners this year included a cadre of rural programs: Coppin State University, North Carolina Agricultural and Technical State University, the University of New Hampshire, and the University of West Alabama.

Want more? U.S. Secretary of Education John B. King, Jr., is hosting a live video chat with educators on Tuesday night to talk about educator support. You can check it out here.

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